List the major reasons, other than to stimulate the economy, that the government spends money. Provide a rationale for each of these types of expenditures
The government spends to buy public goods, merit goods, and to transfer income from taxpayers to specific
groups. Public goods will not be provided by free markets because they are nonrival and nonexclusive.
Merit goods are provided by free markets, but at least some people think that we ought to have more of
them. Transfer payments represent a redistribution of income from taxpayers to specific groups in the
economy to moderate the harshness of poverty or economic distress suffered by members of these groups.
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Farmer Brown produces corn in a perfectly competitive market. Farmer Brown produces and sells 500 bushels of corn. The market supply and demand curves are illustrated in the above figure
a. What is Farmer Brown's total revenue? b. What is Farmer Brown's marginal revenue?
Economies of scale are an important determinant of comparative advantage based trade
Indicate whether the statement is true or false
In the next several decades, the dependency ratio relevant to the Social Security system is expected to ________
A) remain largely unchanged B) rise C) fall D) fluctuate unpredictably
For a country which has a relatively high rate of inflation and wants some form of pegged exchange rate, which of the following exchange-rate regimes is the best choice?
A. Adjustable peg B. Crawling peg C. Fully fixed exchange rate D. Fully convertible currency